Two key factors are contributing to this growth, including the growing popularity of smartwatches and greater wearables adoption in emerging markets.

Global shipments of wearable devices are forecast to reach 125.3 million units this year, up 8.5% from 2017, according to the International Data Corporation (IDC) Worldwide Quarterly Wearable Device Tracker.

Two key factors are contributing to this growth, including the growing popularity of smartwatches and greater wearables adoption in emerging markets, which combined will produce a five-year compound annual growth rate (CAGR) of 11.0% with shipments jumping to 189.9 million units in 2022.

"The transition from basic wearables to smart wearables will continue over the next five years as the two approach parity in terms of market share by 2022," Jitesh Ubrani, senior research analyst for IDC's Mobile Device Trackers, said in a statement. "The rise of smart wearables will not just be in mature markets, but also from emerging markets in Asia/Pacific and elsewhere. Japan will play an equally important role as they consume more than one third of all smart wearables."

Among the smart wearable operating systems, WatchOS will remain in the lead although its share is expected to decline from 44.4% in 2018 to 35.8% in 2022 as other platforms gain traction. The second largest OS is expected to be Android (not WearOS) with 22.4% share in 2022, followed by WearOS which is expected to capture 19.8% share in 2022 as additional vendors begin to offer products and as the platform catches up to competitors in terms of features. The remainder of the smart wearables landscape will be comprised of smaller platforms and vendors although IDC anticipates Samsung, Fitbit, and Garmin to dominate with their proprietary platforms.

Ramon T. Llamas, research director for IDC's Wearables team, expects smartwatch operating systems to evolve along several vectors in the coming years: "First, smartwatches will focus on convenience by proactively providing glanceable and actionable information to the user. Second, smartwatches will provide new means of communication between users, and this is where cellular connectivity will play a significant role in its development. Third, smartwatch operating systems will emphasize connection, not only between users but between wearers and other smart devices and systems. Finally, expect further developments focusing on health with the smartwatch playing a critical role in tracking your health goals and detecting potential ailments."

IDC goes on to forecast that watches will reach 72.8 million units in 2018 with smartwatches accounting for roughly two thirds of the total volume. Total watch shipments are expected to reach 120.2 million by 2022 with a CAGR of 13.3%. Outside of smartwatches, hybrid watches and some basic kids' watches will also continue to ship in large volumes although growth for these types of devices will remain relatively flat throughout the forecast period.

Growth for the Wristband category will remain muted with a 0.3% CAGR from 2018 to 2022. However, it's important to note that this category will still account for 24.7% of the total market by 2022 with the total volume reaching 47 million. These wearable devices will continue to serve multiple purposes from acting as a stepping stone into the wearables market for first time buyers to serving as simpler alternatives for smartwatches. In developed markets, the low cost of these products will also enable them to serve as simple patient monitoring tools.

When it comes to earwear, it will account for less than 2% of the market in 2018, but is poised to capture 6.8% share in 2022. Growth in this category is largely attributed to the disappearance of the traditional headphone jack on modern computing devices. Additionally, an increasing number of vendors are including biometric tracking into wireless headphones which will further help this category.